Rotich eases Kibaki, Moi pension pain for taxpayers by Sh22m

Former presidents Mwai Kibaki and Daniel arap Moi will earn less pension in the current financial year after the Treasury reduced the annual allocation to them by Sh22 million, reversing last year’s increment that was seen as burdensome to the taxpayers.

The retired presidents have been allocated Sh42 million for pension this year down from Sh64 million in the just ended financial year, according to estimates in the supplementary budget.

Retirement benefits of former presidents have come under sharp criticism, especially in the past couple of years when allocations increased by large margins even as the government insisted it had put in place austerity measures to deal with a bourgeoning wage bill.

READ: Taxpayers pick up Sh31.6m Kibaki, Moi insurance bill

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The Treasury did not respond to our queries on what informed the cutback.

If awarded equally the smaller package assures each retired president of a monthly payout of Sh1.75 million — an amount that is higher than President Uhuru Kenyatta’s official salary of Sh1.5 million.

The High Court last year stopped the government from paying allowances worth millions of shillings to the two retired presidents after finding that they were an unnecessary burden to the taxpayers.

The Attorney-General has since appealed the decision, allowing the two continue to enjoy the high packages.

Sections of the law that the court nullified entitled Mr Kibaki and his predecessor, Mr Moi, to a Sh379,500 house allowance per month, a fuel allowance (Sh247,500), entertainment perks (Sh247,500) and utilities (Sh379,500).

Mr Kibaki signed the perks into law two weeks before his retirement, effectively awarding himself millions of shillings on his way out.

The taxpayers picked up a Sh150 million bill in the last financial year alone to keep the two former presidents comfortable in retirement.

The law also entitles the duo to two personal assistants, four secretaries, four messengers, four drivers and bodyguards.

Taxpayers also cater for workers in Mr Kibaki’s Nairobi office that was bought at Sh250 million three years ago and Mr Moi’s office at Kabarnet Gardens off the city’s Ngong Road.

Parliament passed the generous package as an incentive for politicians to leave office voluntarily in the knowledge that their comfort was assured.

Increments to the package have seen civil society organisations such as the National Taxpayers Association query the decision insisting it amounted to increasing the taxpayers’ burden without producing corresponding socio-economic benefits.

The package has also come under heavy criticism on grounds that the retired presidents left office as rich men with property worth billions of shillings and vast business interests.

Mr Kibaki stepped down from the presidency in 2013 after serving two five-year terms while Mr Moi retired in 2002 having been in power for 24 years.

The Treasury increased Mr Moi’s package last year with the revision of his insurance cover from Sh10 million to Sh20 million. The insurance budget for the two in the year ended June was Sh31.6 million or Sh2.63 million a month.

A steep rise in the government’s recurrent expenditure at a time the tax revenues are trailing targets has tightened the country’s cash position, leading to declaration of austerity, including voluntary cut in executive pay.

Kenya’s annual public wage bill has topped Sh500 billion, crowding out the critical development expenditure.

The Kenya National Commission on Human Rights (KNCHR) challenged the presidents’ retirement packages, citing its enactment without input from the Salaries and Remuneration Commission (SRC) as required by the Constitution.

The SRC is the agency with the constitutional mandate to fix salaries, allowances and retirement benefits of all State officers.

The KNCHR argued that the Sarah Serem-led commission was sidelined during enactment of the benefits law, denying it a chance to make an input.

Attorney-General Githu Muigai’s appeal is pegged on an argument that the amended law did not award any new benefits to retired presidents Kibaki and Moi but merely aligned the payments with the benefits that already existed in the previous law.

If the appeal is defeated, payments to the retired presidents is expected to drop by an estimated Sh30 million, bringing the total annual payout below Sh100 million.

Former Prime Minister Raila Odinga and former Vice-President Kalonzo Musyoka had sought to be included in the lucrative retirement package but Mr Kenyatta declined to assent to the Bill, arguing that they have to retire from active politics to enjoy the send-off package.

Had Mr Kenyatta assented to the Bill, Mr Odinga would have pocketed a lump sum package of Sh21.6 million and a monthly stipend of Sh960,000 for the rest of his life.

Mr Musyoka would on the other hand have pocketed Sh19.8 million plus a Sh880,000 monthly stipend.

Members of Parliament have also been fighting to get a compensation package even when they lose elections.

Former ward representatives, commonly referred to as councillors, have also been pushing for monthly stipends in retirement, underlining the load Kenyans bear to sustain the political elites.